UKs biggest lender ends IO mortgages without evidence.

chucky

DervProf wrote: »

Although Graham's point could be viewed as being slightly "frothy", I don't think it can be dismissed out of hand. The first sentence, a bit of froth, the second has merit (not just because he agreed with me).

insurance is insurance though - it's taken out as cover in the event of something happening. clauses are there to protect both the insurer and the insurance issuer.

i disagree that "in many cases, clauses catch them out" because they were there at he beginning of the policy.

in general, insurance is there to pay not to catch policy holders out.

Really2

Graham_Devon wrote: »

Don't need insurance. We have taxpayers and SMI.

Which kinda proves your point. In general, people don't take insurance. And if they do, in many cases, clauses catch them out.

I have insurance GD but max they give generally is £1500 per month. (wage not mortgage) and for 12 months.

Why should I be I put my self in a worse situation than someone on a repayment mortgage or someone not overpaying should the insurance company not pay out or go bust.

Seeing it is my family home why would the most sensible causue of action not be, well sensible.

I bet unemployed renters without insurance make your blood boil?

DervProf

I too had a burgalry claim, and the insurance company provided excellent service (and I only claimed for the item that was stolen, and I didn't pretend that it was a better laptop than it actually was :A). A couple of car claims, and they were fine (although neither were a write off, so I didn't have to "haggle").

I don't think anyone mentioned that you won't get paid out on other types of insurance, I certainly didn't. I just reported a couple of cases that I knew of, where the claim wasn't paid out, even though the policy holder thought they were covered. Personally, I would be very careful if I were taking out income protection or health insurance.

Perfectly reasonable comments and real life experiences. They may not fit in with your perception of the world, but they are facts. If you are insured against unemployment, bad health etc, I don't think that is a bad thing. Hopefully you will never need to claim on those policies, and if you did your homework before taking out those policies, there is very little to be concerned about.

DervProf

chucky wrote: »

insurance is insurance though - it's taken out as cover in the event of something happening. clauses are there to protect both the insurer and the insurance issuer.

i disagree that "in many cases, clauses catch them out" because they were there at he beginning of the policy.

in general, insurance is there to pay not to catch policy holders out.

Listened to Radio 5 as I was driving earlier. They were discussing PPI, and the ruling aganst the behaviour of the banks. It was interesting to hear PPI holders experiences, and some comments from a chap that used to sell PPI. It appears that PPI was there to catch policy holders out, if not extract as much money out of them as possible, let alone sell it to people who may not have really needed it.

Health insurance is another area that seems to be "dodgy". I said earlier that I have a point to make on the subject, which I may do soon.

DervProf

OK Health Insurance.

Due to someone I know falling foul of the "smallprint", I have an idea that would solve the problem (the insurance companies probably won't like it though).

Without going into the tiny details, the person I knew who got a claim refused because a medical test was carried out prior to them taking out the policy. They forgot to mention the test on the application form. When, maybe 18 months later, they had to make a genuine claim, the insurance company found out that the test had been carried out, but not declared. Fair enough, I suppose, the applicant should have been more careful in their form filling. Now I felt slightly sorry for this person, especially as the test had come back "negative", and wasn't related to the actual reason for the claim. It appeared to me that the insurance company was using this as an excuse not to pay out. I assume the insurance company found out about the test via a medical report that they obtained once the claim was made.

Why, oh why, isn't it standard practice for insurance companies to provide a "tick box" on the application form, giving them authority to access medical records before the policy commences ? It would protect both the insurance company, and the prospective policy holder. Cost to the NHS for providing the required medical details ? That could be paid for by the insurance company, and passed on through the price of the policy. Worried about your personal details being accessed by the insurance company ? Well you don't have to tick the box, you'll just have to answer lots of questions and have a pretty good memory about your medical history.

As I said, insurance companies may not like this idea, as it means they will have zero wriggle room in the event of a claim.

Oh, and the same principle could be applied to car insurance. Why, in 2011, do I have to remember my insurance history when I get an insurance quote. I expect that insurance companies keep our details on file while we are insuring with them. Why is there not a system where we can ask insurance companies to release our records to other insurnce comapnies. This would make getting quotes a doddle (maybe why this system isn't in place), and protect both policy holders and insurers against errors (or fraud) being made applications to insure vehicles.

I think these ideas make perfect sense, and would make life a little easier. That's why they haven't been implemented (as far as I know).

DervProf

RenovationMan wrote: »

Perfectly reasonable comments, but with no detail at all. It could very well be that in the couple of cases you heard of that the insurance company proved that the client knew they were going to be made redundant before they took out the income protection.

In neither case was redundancy involved. And I didn't mention that redundancy was involved.

In both cases I know the people concerned very well, and they discussed the details with me.

If you read my posts a little more carefully, you may find that I make reasonable, honest and accurate statements. I am open to being corrected, but as you know, I will argue my case strongly if I am confident that I am correct.

I will now clarify for you what I said in a previous post, although I ask you to forgive me if I don't use the exact wording that I used previously (although I could quote my previous posts, it might be better if I paraphrase one of them, so you might get a better understanding).

2 cases of people who I know very well.

1. My friend had an accident while doing some work at home. He had income protection, covering him if he wasn't able to carry out his work. He injured his knee (falling off some step ladders) and had to have corrective surgery. He spent a couple of days in hospital, and couldn't drive his van for several weeks. He put in a claim to the insurance company, they refused the claim, saying that because he could answer the phone, he was still able to run his business (repairs to domestic equipment).

2. See post #366 above (3rd paragraph).

Redundancy not mentioned, because redundancy wasn't involved.

HTH.

DervProf

RenovationMan wrote: »

Often the client is not prepared to tell the whole story because they look foolish. One regular in our pub had a lot of sympathy when his house had a fire and the insurance company refused to pay out. Turns out his insurance policy had lapsed and it his own fault, yet for years afterwards people still came in and talked about how the bloke was 'stiffed' by the insurance.

That bloke in your pub clearly had nothing to complain about.

I think the people involved in the cases I mentioned did have something to complain about. In the case of the person who got refused because of forgetting to mention a medical test, I was shown a couple of letters from the insurance company, explaining the reasons for the refusal.

And the chap that couldn't drive for several weeks - I went to visit him while he was off work.

Cortinaa_GTR

I've only ventured onto this forum after initially reading the Mortgage Free Wanabee forum. This came about after the rates crash in 2009 when I started overpaying my mortgage which I thought was the way ahead. This thread has covered so many topics and options (and has genuinely fascinated me) I'm now not sure what I should be doing.

What information from my current situation would be required to be able to give a reasonable assessment of which direction I could/should be going in?

Cheers

Really2

Parnott wrote: »

I've only ventured onto this forum after initially reading the Mortgage Free Wanabee forum. This came about after the rates crash in 2009 when I started overpaying my mortgage which I thought was the way ahead. This thread has covered so many topics and options (and has genuinely fascinated me) I'm now not sure what I should be doing.

What information from my current situation would be required to be able to give a reasonable assessment of which direction I could/should be going in?

Cheers

If your after tax savings rate can't beat your mortgage interest rate you are better off overpaying.
There are little exceptions to this rule in my mind.

Cortinaa_GTR

Thanks Really2, I was aware of that and basically thought with getting so little return on savings it was better to reduce the mortgage instead. The mortgage and savings rate is virtually the same at the moment so perhaps it should be an even split of my expendable income.

I'm still in my first property which I really like and always hoped I could hold onto and possibly rent out one day. However whilst reducing my probable negative equity by overpaying I have no chance of a second mortgage without a deposit. To save up and overpay seems like it will take forever although I'm perhaps fortunate to have a place over my head and have some left over at the end of the month.

I didn't understand all that was contributed in the thread so wondered if I could be working a bit smarter but seem to have the basics covered. :-)